Russian services sector activity dives to record low in April: PMI

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MOSCOW (Reuters) - Russian services sector activity dived to a record low in April as emergency restrictions to limit the impact of the coronavirus pandemic closed businesses and caused demand to plummet, a business survey showed on Thursday.

The Markit Purchasing Managers’ Index (PMI) for services fell to 12.2 in April from 37.1 in March, far below the 50 mark that separates expansion from contraction and its lowest reading since the survey began in October 2001.

“The sudden shock to business operations became blatantly apparent in April, as new order inflows dried up and firms cut employment at the sharpest rate in the series history,” said Sian Jones, an economist at survey compiler IHS Markit.

New business for Russian services firms contracted at a record pace, with the related sub-index slumping to 20.3 in April. The employment sub-index fell to a series low of 30.7.

Business expectations remained pessimistic, but confidence had increased slightly from March levels.

“In line with negative expectations among private sector firms, we currently forecast a 3.6% contraction in GDP in 2020,” said Jones.